What is Xero software
Xero is a modern business cloud online accounting software, it is a place to do your bookkeeping and is online. Users pay a monthly subscription which is tiered based on a businesses needs. Xero currently has over 500 applications such as links to other software such as stripe.
How do I set up Xero?
The are lots of how to guides out there, Xero provide a lot of help on how to set it up. Ideally you will want to set up your organisation details, you can access this by going to settings – organisation settings. It will let you put in your trading name, display name, email, reg number (if applicable), registered address, phone, log and website.
Next it is a good idea to set your financial settings, this is your financial year end and details of your VAT scheme if you are registered for VAT. You can find this by going to settings – advanced settings – financial settings.
You can add your company’s branding, this is a great way to personalise the software and make it easily recognisable that it is your business. You simply go to settings – invoice settings. Here you can adjust payment terms which can have a good affect on your cash flow.
Amend the standard chart of accounts, this really helps with reporting and making sure items are put in the right places for example you may want to separate sales into different categories such as wet and dry goods if you are a cafe or you really want to differentiate between public and trade sales. To make any changes to the chart of accounts you click accounting – chart of accounts.
Set up a bank feed – this will save hours. Gone are the days of manually inputting every bank transaction. You can even link credit cards and paypal accounts. Please remember that automatic feeds can sometimes fail and go wrong. It is really important to do a manual check against your actual bank when you reconcile. We have seen banks which are thousands out as clients don’t understand the importance of checking this.
This will let you do the basics on Xero, you may want to connect apps, add users or look at reports to show you how profitable you are.
What are the benefits of using Xero?
If you speak to different bookkeepers they will have their own favourite software, Tidal Bookkeeping has chosen Xero as our software of choice, we feel it is better to know a software really well then to know all of them a bit, so what are the benefits?
You can access Xero from anywhere, it is cloud based – you are not stuck on one pc in an office, once you have your login you can log in from anywhere – please remember to not save your password if others have access. This is so important especially with the current pandemic, the ability for flexible work places is paramount. The benefit of it being cloud based is you don’t have to wait for the right back up to come over from another user before working on it.
It has quarterly updates. Xero releases updates regularly meaning they are making improvements all the time, this makes it very user friendly and also means it’s at the top of it’s game. It also listens to it’s users and makes changes based on recommendations.
Great reporting. Xero has standard reports such as profit and loss, balance sheets and receivable reports to name but a few, but it also has customisable reports so you can see what you need to. Most reports contain filters so they can be altered.
How can I learn how to use Xero?
Xero has a great training portal where you can learn the basics.
What are the benefits of using an accountant trained in Xero?
Using a Xero accountant means that you are working with a professional who is very well trained in Xero. They will know the software inside out. A trained accountant/bookkeeper will make sure the records on Xero are accurate, items are recorded in the correct places and errors are eliminated. Your invoicing and cash flow can be improved when Xero is used correctly for example invoices can be sent quickly, a check can be done to see who owes you money and you can make sure you don’t overpay suppliers.
You can also save money, lots of clients, despite adverts telling you how easy it is, can make mistakes on software and create a mess. It can take hours to sort these errors which can be costly. By outsourcing to an accountant/bookkeeper at the start, it can save you a lot of money and give you peace of mind that your books are done correctly.
If you are interested in outsourcing your bookkeeping please call 01209 702920 or visit our contact page here.
The information featured in this article is for guidance only, no liability is accepted for the opinions it contains.